Buy Dixon, Wipro shares for gains; Bank Nifty may head to 38000 soon

Buy Dixon, Wipro shares for gains; Bank Nifty may head to 38000 soon

By Rohan Patil

After forming a bullish engulfing a reversal candlestick pattern, the index continued to trade higher and closed higher indicating a bullish pattern confirmation. On March 15, prices formed a bearish dark cloud cover pattern and on the next immediate day, Nifty closed above the high of the bearish pattern and confirms the failure of the bearish setup. On analyzing the daily chart we have witnessed two unfilled gaps created on March 10 and March 17, which can be called a continuation gap on the daily time frame. Nifty 50 has given almost four per cent returns in just two trading sessions which indicates a strong comeback from the bulls.

As of now, the prices have given a positive breakout above their important resistance level which is placed at 16900 levels and will act as immediate support in the coming weeks. On the higher end if everything goes right then the 17800 level cannot be ruled out in the near further.

Bank Nifty may head to 38000

Two back to back strong closing on the weekly chart of the banking index indicates a roaring comeback of the bulls in the Indian market. Prices close five per cent higher from its previous week’s close and also closed above its two weeks high on the weekly time frame; indicating a strong bullish structure for the short to medium term. The momentum oscillator RSI (14) has made a double bottom formation on the weekly chart near 30 levels and prices have shown a strong reversal since their after. Currently, the indicators and oscillators are on the bull mode and trending higher on the daily time frame.

As of now, the prices have given a positive breakout above their important resistance level which is placed at 35650 levels and will act as immediate support in the coming weeks. On the higher end if everything goes right then the 38000 level cannot be ruled out in the near further.

DIXON: BUYTarget: Rs 4800 | Stop Loss: Rs 4300Return 07%The prices were trading in a consolidation range for the past one and half months and have formed a trend line resistance at 4400 levels.

DIXON has broken out of a consolidation range at 4478 levels on 17th March and the prices have registered a decisive breakout that suggests a change in the trend from sideways to upside. Stock is trading above its 21 – day exponential moving averages on the daily time frame, which is positive for the prices in the near term.

We have also witnessed an above-average volume activity on the breakout day indicates a prices volume breakout set up for the counter. Momentum oscillator RSI (14) is reading above 55 levels and has given a horizontal trend line breakout which indicates positive momentum will like to continue ahead.

WIPRO: BUYTarget: Rs 631 | Stop Loss: Rs 583Return 05%The prices were trading in a rectangle pattern for the past two months and have formed a trend line resistance at 600 levels.

WIPRO has broken out of a rectangle pattern at 602 levels on 17th March and the prices have registered a decisive breakout that suggests a change in the trend from sideways to upside. Stock is trading above its 21 & 50 – day exponential moving averages on the daily time frame, which is positive for the prices in the near term.

The MACD indicator is reading above its centerline with a positive crossover above its signal line. Momentum oscillator RSI (14) is reading near 60 levels and has given a horizontal trend line breakout which indicates positive momentum will like to continue ahead.

(Rohan Patil is a Technical Analyst at Bonanza Portfolio. Views expressed are the author’s own. Please consult your financial advisor before investing.)